Krome Studios: Things Fall Apart

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We go behind the scenes of Krome's collapse and talk to the CEO and a number of ex-employees.

By Andrew McMillen

It's the question that's been reverberating around the corridors of the Australian game industry for three weeks: what causes Australia's largest video game development studio to close its doors? Andrew McMillen investigates, and discovers that Krome's current situation isn't as clear-cut as first reported.

The Precursor

"Too often, game companies can fall into a production line mentality, and I think that hurts the morale of the employees who are naturally creative people – and in turn the creativity of the company, as a whole." –Ex-Krome Employee

As the annual Game Connect Asia Pacific (GCAP) event drew to a close on Friday, October 15, the local games industry's mood of inspiration, optimism and enthusiasm was given a brutal reality check via whisperings that Brisbane-based Krome Studios was shutting its doors. Word spread among the industry quickly, and reports began appearing on sites like Tsumea that the developer – established in 1999 – was conducting a round of staff lay-offs.

Such events were not unfamiliar to the Australian gaming industry, as the studio had been through regular rounds of employee redundancy in parallel to a decrease in development contracts. At its peak in July 2009, Krome employed over 400 staff across studios in Brisbane, Melbourne and Adelaide; four months later, 60 staff were let go, followed by another 50 in April 2010, and then an estimated 100 in August, which brought Krome Studios Adelaide to an end. The company was co-founded in 1999 by CEO Robert Walsh, creative director Steve Stamatiadis, and design director John Passfield, who left Krome in 2005.

Krome's humble starting point.

Their first project was the 2000-released 'Championship Surfer' for Dreamcast, PlayStation, and PC; the studio achieved international success with its first original IP, the EA-licensed 'Ty The Tasmanian Tiger' (PS2, Xbox, GameCube), which spawned two sequels. Krome also had a hand in the reboot of the popular 'Spyro The Dragon' series, and in recent years, had been responsible for console-based releases for licenses like Star Wars ('The Force Unleashed' [PS2, Wii, PSP], 'Clone Wars – Lightsaber Duels' [Wii]), Hellboy ('Hellboy: The Science Of Evil' [PS3, X360, PSP]) and Transformers ('Transformers: Revenge Of The Fallen' [PS2, Wii]).

So what caused Australia's biggest video game developer to drop from 400 staff, to 190, to – seemingly – zero, within the space of 15 months?

The Breakdown

"Horrible staff allocation and enormously stressful schedules on tiny budgets were the standard. Krome had ex-employees from extremely reputable companies sitting around doing nothing for weeks on end. I'm not going to name names, but I will say that some decisions of upper management were profusely stupid." – Ex-Krome Employee

IGN Australia spoke with several former Krome staff for this story. None of them were willing for their quotes to be attributed: some cited signing non-disclosure agreements in conjunction with their dismissals, which limited what they were able to discuss. Others feared negative repercussions from their peers or potential employers for publicly commenting on the issue. As a result, the five former Krome employees who spoke to IGN for the purposes of this story did so under the veil of anonymity.

Their responses to their dismissals and wider reports of the studios' closure varied. "It came as little surprise," one source reveals. "After multiple rounds of lay-offs six months apart, like clockwork, and little, if any new work coming in, it was no surprise that Krome would shut down. What did surprise me is that it happened now. There was one larger project that was due to finish next year. I predicted to my workmates that the project would finish and then – assuming no other projects came though – Krome would close for good. The only thing that surprised me was that it didn't even last that long."

Hellboy was a dismal title that struck a serious blow to Krome's stability.

The timing of the latest round of firings surprised another former staffer. "It was unexpected at that time. Having survived three redundancies, our team was getting settled and highly motivated again. I was working on a project which we had all assumed was safe. The publisher was happy, and we were happy to be working on it. We found out on Friday [October 15] and were slightly in shock, though we had heard we might be re-hired on contract to finish out the project. However, that never eventuated, as news of the closure reached the publisher and we cleared out the following week."

One accusation often levelled against the studio is that their games fared poorly when placed under a critical microscope – or, in the words of many recent online comments, Krome made "crap games". Aggregated scores on GameRankings.com average around 70% for the Ty The Tasmanian Tiger series across multiple platforms; so too The Legend Of Spyro: A New Beginning and Star Wars: The Force Unleashed. From there, it's a downhill slope: Viva Pinata: Party Animals (X360, 58%) Transformers: Revenge Of The Fallen (avg. 50%), Hellboy: The Science Of Evil (avg. 46%) all scored poorly, as did the studio's newest release – and first original game (or 'original IP', in industry parlance) in years – Blade Kitten, for the PS3, X360 and PC. Released in September 2010, Blade Kitten averages a 55% rating from dozens of reviews.

What Went Wrong?

Why were Krome's games regularly judged to be average, at best? It can't simply be a matter of talent, as it's widely acknowledged that the studio employed some of the best game programmers, artists and designers in the Australian industry. The answer may come down to the very nature of the contracts that Krome persued. "Every game I've been involved with has had a ten month development schedule, or less," reveals an ex-employee with over five years' experience at the company. "Most of the time, it just came down to the short development schedule. Publishers would put pressure on the studio to develop games in short timeframes, and we couldn't argue, because they pay the bills."

The years between critically successful projects caused some staff to become jaded with the constant work-for-hire cycle. "Everyone gets into this industry because they want to make great games, not because they want to make the next great low budget children's licence," another source comments. "I understand you have to pay the bills, but when that's all you're doing, year after year, you begin to lose enthusiasm. I think sometimes companies can forget that, and that's when you start to lose talent."

When questioning former staff about their theories on the company's downfall, some recurring themes emerged. Among them: a too-heavy emphasis on work-for-hire projects on behalf of American publishing houses instead of their own IP; the creative Director's self-destructive obsession with his Blade Kitten game, at all costs; a lack of government support for the Australian gaming industry; the tumultuous relationship between the American and Australian economies in recent years, poor management decisions; and the emergence of international studios whose significantly lower project costs are unable to be met by their Australian competitors.

"Would Krome have survived if the government had funded it more? Maybe, but that's not the point. Government funding should be heartily given to build local companies who want to build the local market in the form of original I.P. It serves no-one if the government finances those whose only interest is creating other peoples' licenses until the well runs dry. Krome's closure should absolutely not be a sign that the government should reconsider funding the games industry -- the government should rather refine their support, ensuring it goes to companies and groups with the desire for the correct type of growth." –Ex-Krome Employee